I am so grateful for any guidance I can get on this, I love what I am discovering and look forward to becoming more proficient!
As to your points:
The Background Image I am using is a JPEG that I downloaded from a Google Image Search. Perhaps the original was layered and I was not aware of it, but the entire image (the burgundy and stars and stripes) were all one image to the best of my knowledge.
The Logo itself I created from scratch in Paint and it originally had a royal blue background.
When I say I "Imported" the image, I am referring to clicking on the Layers heading at the top of the screen, then selecting Import From File.
This time, I have followed these steps:
Opened the background image with this application.
Resized the original by 250%
Dropped down Layers and selected Import From File
The Logo was placed at the upper left portion of the screen, highlighted with the Move Selected Pixels Tool
I repositioned the Logo to the center of the screen, again leaving the cutout behind it.
I hope that illustrates it a bit better. Thank you both again so much for your help, I am learning a lot already!